China E-commerce Sales Growth Slows in March, with Divergent Category Performance

Overview

This report is a monthly data brief on China's e-commerce sector, with a core basis in the National Bureau of Statistics' March 2026 retail data. The report focuses on online merchandise sales growth, e-commerce penetration, and the online and overall retail performance of major consumer categories. The overall conclusion is that e-commerce sales growth slowed materially in March versus the first two months of 2026, but the average Q1 growth rate still improved from Q4 2025, and the industry showed category divergence.

Core views

China's e-commerce sales growth slowed to 2.5% y/y in March, a marked deceleration from 10.3% in the first two months of 2026; however, average Q1 growth was 7.5%, above 2.3% in Q4 2025. Online catering, apparel, and home goods all slowed, and food and daily necessities within staples also decelerated; beverages, PCs, smartphones, and cosmetics performed relatively well. Home appliance sales fell 5% y/y, which the report says was mainly dragged by a high base and weaker effects from trade-in programs.

Analysis framework

The report uses monthly macro retail data and category y/y growth tracking to compare online merchandise sales, overall retail sales, e-commerce penetration, and key category performance in order to assess marginal changes in China's e-commerce and consumer demand.

Methodology notes

• Industry Data TrackingNational Bureau of Statistics Retail and Online Sales YoY Growth Tracking

  Track the health of China's e-commerce industry by monitoring monthly online merchandise sales, y/y growth, and e-commerce penetration.

  The report compares March data with the first two months of 2026, Q1 2026, and Q4 2025 to identify slower growth, q/q improvement, and category divergence.

• Category Structure AnalysisConsumer Category YoY Growth Comparison

  Compare by category: online catering, apparel, and home goods, as well as food, daily necessities, beverages, PCs, smartphones, cosmetics, home appliances, and apparel in overall retail.

  This method is used to determine whether the e-commerce slowdown reflects broad demand weakness or structural changes caused by base effects, pricing, or the fading of policy measures in certain categories.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• China e-commerce platform and internet retail-related stocks

  Industry sentiment proxy

  Strengths

  The e-commerce penetration rate still rose slightly y/y, and average Q1 growth improved versus the previous quarter.

  Weaknesses

  March online merchandise sales growth slowed markedly, and growth in some core categories declined.

  Comparison

  March e-commerce growth of 2.5% y/y was below the 10.3% growth in the first two months of 2026, but Q1 growth of 7.5% was above Q4 2025's 2.3%.

  Risks

  Consumer demand weaker than expected, lower effectiveness of platform subsidies, deteriorating category mix, and changes in regulation and the macro environment.

• Home appliance retail and durable goods-related assets

  Negative category signal

  Strengths

  Previously supported by trade-in programs, creating a high base.

  Weaknesses

  March home appliance sales fell 5% y/y, a sharp slowdown from the previous 3.3% growth.

  Comparison

  Compared with the stronger growth in PCs, smartphones, and cosmetics, home appliances were weak.

  Risks

  High base, weaker policy-program effects, and lower willingness for big-ticket household purchases.

• PC, smartphone, and cosmetics-related consumer chain

  Relatively positive category signal

  Strengths

  In March, PC and smartphone sales rose 15% and 27.3% y/y, respectively, while cosmetics grew 8.3% y/y.

  Weaknesses

  Some of the growth may come from price increases or short-term supply-demand factors; sustainability still needs to be monitored.

  Comparison

  Growth in these categories was higher than earlier levels and clearly better than home appliances and some daily necessities.

  Risks

  Weaker price support once memory-supply tightness eases, demand pull-forward, and unstable consumer recovery.

Key data

• March retail sales (excluding autos)RMB 3.8 trillion, up 3.2% y/yData source: National Bureau of Statistics.
• March online merchandise sales (excluding service transactions)RMB 1.1 trillion, up 2.5% y/yMarkedly slower than the 10.3% growth in the first two months of 2026.
• Average e-commerce growth in Q1 20267.5%Higher than 2.3% in Q4 2025.
• March e-commerce penetration rate29%, up 0.3 percentage points y/yIndicates the share of online channels in total retail continued to edge up.
• March online catering sales growthup 17.2% y/yBelow the previous 20.7% growth rate.
• March online apparel sales growthup 11.6% y/yBelow the previous 18% growth rate.
• March online home goods sales growthup 3.6% y/yBelow the previous 4.7% growth rate.
• March PC and smartphone sales growthup 15% and 27.3% y/y, respectivelyAbove the previous 5.8% and 17.8%; the report attributes this to price increases caused by tight memory supply.
• March home appliance sales growthdown 5% y/yPreviously up 3.3% y/y; the report says this was affected by a high base and weakening effects from trade-in programs.

Impact & implications

The report suggests that near-term growth momentum in China's e-commerce industry is marginally slowing, but not all categories are weakening at the same time. From an investment perspective, revenue growth for platform e-commerce and consumer internet companies may depend more on category mix, subsidy campaigns, price changes, and the sustainability of policy stimulus; durable goods, especially home appliances, may face high-base and policy-rollback pressure, while categories such as smartphones, PCs, and cosmetics still show relative resilience.

Risks

• Consumer recovery falling short of expectations could keep e-commerce growth slowing.
• High bases and weaker effects from consumer-stimulus policies may drag on home appliances and other durable categories.
• Online sales growth may be influenced by price factors and not fully reflect real volume improvement.
• This report is an industry data brief and does not provide company-specific earnings forecasts, ratings, or target prices.

What to watch

• Whether the year-on-year growth rate of online merchandise sales can rebound from the March low in subsequent months.
• Whether e-commerce penetration continues to rise, especially on a seasonally adjusted basis.
• Whether policy programs such as home appliance trade-ins continue or are expanded.
• Whether the strong growth in PCs, smartphones, and cosmetics can be sustained.
• Changes in growth rates for high-frequency consumption categories such as food, daily necessities, apparel, and home goods.